From Texas, I mostly cover the energy industry and the tycoons who control it. I joined Forbes in 1999 and moved from New York to Houston in 2004. The subjects of my Forbes cover stories have included T. Boone Pickens, Harold Hamm, Aubrey McClendon, Michael Dell, Ross Perot, Exxon, Chevron, Saudi Aramco and more. Follow me on twitter @chrishelman.

10/18/2011 @ 11:54AM102,020 views

Some Tips For The Simpletons of 'Occupy Wall Street'

The following is a guest column by, Richard B. Finger, a private investor with Ariadne Capital LLC, in Houston, Tex. The opinions expressed are his own.

My philosophies may be diametrically opposed to those of the simpletons in the Occupy Wall Street movement, but when it comes to the banks and the government, my anger makes me kindred with them.

I realized this on a recent cool, crisp October morning in Houston. With summer’s gross heat and humidity gone, the weather is finally ripe for complaining. It’s hard for me to remember the last time I attended a rally or demonstration either as observer or participant. “Occupy Houston” had arrived in Texas. Approaching the JP Morgan Chase building, the tallest in Houston, I heard the chants: “We want jobs, we want jobs.” The chants morphed seamlessly into: “Corporate greed has got to go.” The crowd really got lathered up on this one.

An amusing and (previous to me) noted irony is with all the railing and carping over corporate evils, it was hard to miss the Apple I-phones and I-pads. Certainly present were also phones powered by Google’s android system. The Nike swoosh was prevalent. I can only guess the number of these corporation bashers who own Microsoft products. I even saw that elitist Ralph Lauren logo. Hard to know which nefarious corporation makes the cardboard for all those signs, but it is most certainly a big bad one that probably employs a whole lot of people. If they buy “green” electricity, (assuming they purchase any at all), which any demonstrator with an ounce of self-righteousness would, there’s a real good chance they are supporting one of the biggest and “baddest” of them all, wind turbine manufacturer General Electric. Carefully ignored by these do-gooders is the confluence of grand creativity, greed, and billions in profits and millions of jobs these profits and cupidity have created.

Of course, signs with “we are the 99%” were ubiquitous. I have since understood this pithiness as something of a “corporate” logo. Pun intended. Judging from the recent employment reports, a more accurate mantra might drop one of those 9’s.

One twenty something female with a large nose ring and indeterminate hair color told me she really didn’t know what the exact platform was, though her unambiguous paperboard dispatch said, “take from the rich and give to the poor”. Call me prejudice, but if the credibility of an organization is inversely proportional to tattoos and body piercings per square inch, this is a movement of dim prospects. One much older gentleman, (probably fortyish) claimed the Federal Reserve was a private company and should be handed to the government henceforth. I attempted a small dose of enlightenment but quickly met rabid intransigence. Another, a ponytailed stick like figure, explained the movement as one designed to give the country “back to the people”. What? I queried a pregnant woman who had just rushed from yoga class to protest home foreclosures. Apparently, it was monumental injustice that the big bad bank was enforcing its contractual rights in light of over a year of non- payment. Comfort in being surrounded by the same species of fish. Engulfed in a haze of nescience was all I could feel. Amid this scene of “organized chaos” and disjointed dialogues there were some themes that personally resonated. “Bank CEO’s Should Be in Jail” was one. Well, probably at least some of them. Another sign, “JP Morgan’s $10 billion in bonuses belongs to us” might bear some debate.

Since attending the Houston rally, the movement has metastasized globally to include hundreds of thousands or even a several millions. Notwithstanding, the “Occupy Wall Street” movement, even egged on by our president, so far, in my opinion, has little more than nuisance value. Defacing parks, mini rioting and getting arrested analogizes them akin to the clutch of ragtag farmers with shovels and pitchforks marching on the local government demanding rain. These people don’t even know what their hostility is about.

With no cohesive defined platform there can be no discernable end game. The only certitude is being very very angry. For sure, there is plenty to be aggravated about. So guess what, I’m really mad too. And polls consistently reveal that so are a vast majority of Americans no matter political stripe. Until late summer 2008 our economy, despite showing some signs of stress and trending down, was pretty much cruising along. And then along came the Lehman bankruptcy, the AIG bailout, TARP, revelation of the extent of the mortgage crisis and associated speculations, and failure of Fannie Mae and Freddie Mac. People were minding their own business and all of the sudden a cataclysm occurred. Unemployment soared, bank credit seized up, and our country was in recession. While there is some improvement from the 2009 bottom, the country continues mired in a malaise of slow growth and unacceptable unemployment. The result has been a zeitgeist, heartily promulgated in Washington, of “the banks are evil and it’s all their fault so they are not entitled to profits ever again”. Much more accurate is the top eight to ten banks employ well over one million people. They have paid all of their TARP money back, in full, with interest. These banks have helped and continue to assist millions of people obtain home mortgages and provided businesses, small and large, with working capital and other loans to expand, further increasing employment . When a bank makes a loan the very best outcome it can hope for is to get paid back with interest. What is also true is that there were (and still are) a few really bad apples at the banks, the investment banks (although they are now defined as banks), the ratings agencies, and the GSE’s (Fannie and Freddie).

BUT, in many ways, our system has worked. Banks made loans equal to 90, 95 and even 100% of home values. When homeowners (speculators?) could not meet their mortgage payment obligations, banks enforced their contractual right to foreclose. Borrowers might have lost their down payment (5-10%), but banks were stuck with the rest of the risk and downside. The real loss has been borne by banks and their shareholders. A real transfer of wealth has gone from bank shareholders to defaulting homeowners. Exaggerated anger against the banks might be misdirected.

Though certain that “Occupy Wall Street” participants are in large part diametrically opposed to my economic philosophies, anger is the thread that makes us kindred. Much of the simplistic, often puerile, often non-sensible amorphous ranting ought to be “matured” to a more specific platform. Perhaps my partial list of ills might aid this unorganized mass to channel their indignations more productively:

–While banks accepted government loans and support, bankers felt entitled to billions in bonuses paid in 2008 and 2009. Bank boards were complicit in these awards. Egregious, unfair, and yes, immoral under the circumstances at the time, these should be “clawed back” (repaid back to the banks) and distributed to innocent shareholders who suffered.

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OUTLAW THE LOBBYISTS!!! End of story. END H.F.T. or rather high frequency trading. If the occupy folks had one main goal that could bring together 99% it would have to be to end political lobbyists. Why lobbyists are legal in any professional form just blows my mind. The united states constitution states “a government of the people, by the people, and for the people”. Howard Shultz of Starbucks is on the correct path in witholding political contributions. He is only off the mark possibly,in that his goal is a temporary one. One vote per citizen. Low political contribution limits. OUTLAW CORPORATE POLITICAL CONTRIBUTIONS. Take back the government from unethical corporations and the excess of greed. Not all business people or large corporations are unethical or deserve this widespread mud throwing. The special interests must lose their hush money power. I believe that 99% can agree with this. Think Ben and Jerry’s from way back. There are corporations that have good intentions. Sometimes things go bad in time. The rules must be re written. Ethics can not be taught in a classroom. Ethics can only be instilled by a strong loving family that is not pushed to the limits to survive thinking they have no other way to raise their children other than to turn on the t.v., buy the kid an ipod, cell phone, put them in daycare etc. Pretty much everything except have someone raise the child properly with an incentive other than making them a little consumer. America has become the consumer gone wild. The power of the corporation, the ad machine, the google, the mobile apps, the lack of guidance and commen sence has turned these protesters into an angry voice that does not know what is exactly wrong or what they exactly want. They know they want their voice to be heard over the voice of GOLDMAN SACHS. Good luck to us all. This may be the end game. Buy North American. Think 100 miles. Love

Finger ruins all efforts at common cause by using the Fox News technique of beginning with invective. I certainly wouldn’t have any chance launching dialogue with a Tea Party member if I initiated conversation by saying “Hey, teybagger, let me tell you where you’re right and wrong.”

There are certainly many members of the Occupy movement who are ignorant about basic economics. There are also activists who are gold-standard, hard-currency anti-Fed conspiracy theorists. But there are also many who are very astute and aware of the issues Finger discusses. He immediately turns them off by beginning the search for common cause by calling them simpletons.

Regarding your statement that the banks took massive losses on subprlme mortgages. 20years ago when I was a much younger simpleton, my home loan was a subprime loan and I was required to purchase PMI (private mortgage insurance). The premium for this was rolled into my mortgage payment and if I defaulted on my mortgage then this insurance would pay the lender the balance of my loan. My question then is; why isn’t there an investigation into what happened to the proceeds from the PMI which should have been paid to these subprime lenders? Have these banks been publicly claiming losses while collecting billions of dollars in insurance claims at the back door where no one is watching?

I find your attitude repulsive Mr. Finger. Yes, these few individuals you talked didn’t have a common platform, or knew what they are really fighting for. They just know something is wrong. They believed that the people with the knowledge and power would have done something either to prevent the financial crisis or to fix. But here we are, so they’ve taken matters into their own hands and are trying to find their voice.

And when someone like yourself tries to give them “tips” you belittle them. They need direction and leadership from someone who knows what the real issues are. If you really wanted to help, then use Chris Hedges as an example.

Here you are on a huge platform like Forbes and giving good insight on what needs to be done and at the same time trying to take power away from the protesters by implying that they are stupid. And by further adding to the rift between the protesters and those who don’t understand the protesters.

Your comments on home foreclosure also sickens me. You have never been close to being forced out of you home or you would never simply call it a contractual obligation. My husband and I each own a small business. He is a home remodeling contractor, so when the recession hit clients slowly stopped calling because they couldn’t get home improvement loans. We made it through the first and second year of hard times, but by the time the third year hit we had used up our savings. We were considered high risk and were refused credit. Then our home went into pre-foreclosure which took only two months of non-payment. One more month and they were going to foreclose. I don’t know where you get the idea that it takes a year.

Through our family and clients who knew us and would pay for small jobs, we were able to catch up our mortgage. Had we been smarter with our money or planned for a longer recession, we would have been ok. But as it turns out finance and the economy is quite complicated otherwise as a financial investor your own clients wouldn’t even need you.

Anger over wall street extends to the abuse of medicare/medi-cal/medi-caid paid by the federal and state government. For instance, Sun Healthcare Group Inc, operators of hundreds of nursing homes throughout the US, had a California state injunction NOT to under staff nurses again after killing 3 and seriously injuring 6 others in Burlingame, Calif in 2000. Yet in 2003 they did just that in Newport Beach, California, killing my mother, Evelyn Calvert, and 4 others I witnessed. They weren’t held accountable by the Dept of Justice. The CEOs in fact bought 4 multi million dollar oceanfront homes down the street from the facility they killed patients in, an area known for large waves “the Wedge” in Newport’s famed Balboa Peninsula. Richard K Matros lied to the SEC when he merged Sun with Peak Medical and again with Harborside both in 2005 and again in 2006 that he knew of no liability that could affect the company’s financial condition, while he was the one who caused the 5 deaths, most who died after I personally pleaded with him in writting for help. So did his Medical Director, Dr L Scott Stoney, who wrote a scathing medical review I’ve posted on my blog site at: www.sunhealthcaregroupinc.blogspot.com